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Electronic Commerce Transactions

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The sharing of business information, maintaining business relationships, and ... Technophobia. Security fears. Technology not user friendly ... – PowerPoint PPT presentation

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Title: Electronic Commerce Transactions


1
Electronic Commerce Transactions
  • Week 11

2
Objectives
  • What is e-commerce
  • Implementing transactions over the internet
  • Managing security risk
  • Tools for implementing e-commerce
  • Consumer and business markets for e-commerce

3
What is e-commerce
  • The sharing of business information, maintaining
    business relationships, and conducting business
    transactions by means of telecommunication
    networks
  • E-business denotes a broad holistic concept
    encompassing internet related technologies on
    business functions, from human resource
    management to marketing to corporate strategy

4
Aspects of Traditional Electronic Commerce
5
Relative Significance of E-commerce in Different
Countries
6
A History of E-commerce
  • Electronic Data Interchange the exchange, using
    digital media, of standardized business documents
    such as purchase orders and invoices between
    buyers and sellers
  • Financial EDI an aspect of the electronic
    payment mechanism involving transfer of funds
    from the bank of a buyer to a seller

7
Level of E-commerce Sophistications
8
Reasons for the Growth in E-commerce
  • Increase in demand for choice (product depth,
    global reach, price choices)
  • Demand for information (detailed product
    information, inventory, inventory, order status)
  • Demand for interactive, online support
  • Avoidance of travel and parking difficulties for
    consumer e-commerce
  • Elimination of time constraints (that is, opening
    hours or delays between placing an order and
    delivery)

9
Benefits of E-commerce
  • Lower purchasing overhead especially for small
    value and repeat orders
  • Greater choice (greater product depth and global
    reach)
  • Faster fulfilling cycle time (ordering, shipping,
    billing)
  • Greater ability to supply information (inventory,
    order status, etc.)
  • Lower cost than EDI
  • Ease of swapping between suppliers greater than
    with EDI

10
Benefits for suppliers
  • A global reach, leading to more orders
  • Reduced administration overhead (paperwork
    automation leading to a lower cost for each order
    made)
  • Reduced asset requirement (physical properties
    for companies with a retail network)
  • Integration between back office and online
    shopping activities
  • Integration of online shopping activities with
    database marketing
  • Less need for distribution via channel (disinter
    mediation)
  • Reduced working capital (inventory)

11
E-commerce Enablers
  • Internet standards
  • Bandwidth development
  • World Wide Web
  • Diversification and proliferation of internet
    access
  • Development of off the shelf e-commerce products

12
Inhibitors to E-commerce
  • Technophobia
  • Security fears
  • Technology not user friendly
  • Poor performance leading to slow download
  • Inertia of habitual conventional shopping and
    purchasing
  • Internet access still limited
  • Entrenched interests (for example, distributors
    who may be bypassed)

13
Payment system requirements
  • Be secure
  • Be easy for buyer and seller to use and
    understand
  • Be straight forward for banks to administer
  • Be scalable across different currencies and to
    different denominations
  • Have a low costs for implementing transactions

14
Consumer Payment Systems
  • Purchasers
  • Merchants
  • Certified Authority (CA)- body that issues
    digital certificates that confirm the identity of
    purchasers and merchants
  • Banks
  • Electronic token issuer dependent on digital
    certificates for security

15
Non-credit of Pre-paid Systems
  • Digital, virtual or electronic cash
  • Microtransactions or micropayments such as
    Millicent
  • Debit cards
  • Smartcards

16
Post-paid or Credit-based Systems
  • Digital/electronic cheques
  • Credit cards such as Visa or MasterCard

17
Requirements for Security Systems
  • Authentication
  • Privacy and confidentiality
  • Integrity
  • Non-repudiability
  • Availability

18
Methods of Increasing Security
  • Encryption
  • Secret-key (symmetric) encryption
  • Public-key (asymmetric) encryption
  • Digital signatures
  • Identifies individuals using public key
    encryption
  • Certificate and certificate authorities (CA)
  • Secure Electronic Transaction

19
Constraints on Selecting an E-commerce Solution
  • Cost
  • Quality of service
  • Performance of service
  • Downtime
  • Security
  • Cards supported
  • Currencies supported
  • Time taken to set up an account

20
Constraints on Selecting an E-commerce Solution
  • Transaction method
  • Traditional (phone/fax/mail)
  • E-mail
  • Online transaction
  • Number of products required
  • Volume of sales
  • Shopcreator Stall supports up to 10 products
  • IBM \Home page creator supports 15-500 items
  • BT StoreFront supports a small to medium number
    of products

21
Constraints on Selecting an E-commerce Solution
  • Cost of product
  • Configurability
  • Personalization facilities
  • Integration with back-end systems
  • Integration with stock control system to
    determine availability is vital
  • Integration with stock control system will allow
    price and product information changes to be
    updated rapidly
  • Integration with adequate fulfillment services
  • Integration with e-mail to conform order to
    customer

22
Consumer Business Markets for E-commerce
  • Business-to-business
  • Familiarity with the technology
  • Account selling
  • Consumer markets
  • Acceptable Internet access mechanisms
  • Payment mechanisms perceived as convenient and
    secure
  • An attractive and usable media interface

23
The Commercial Environment for E-commerce
  • Legal status of banks
  • Non banks are subject to less scrutiny and
    regulation
  • Non-banks are at a competitive advantage as they
    do not carry the costs of the high level of
    registration
  • Non-banks do not report to central bank which
    leads to uncertainty and instability in the money
    supply
  • Tariffs and taxation
  • Value added Tax charged depending on location of
    supplier and consumer
  • Export and import tax implications
  • Services attract VAT according to where the
    supplier is located

24
Contracts consumer protection
  • Location and identity of supplier and in case of
    contracts requiring payment in advance his
    address
  • The main characteristics of the goods or services
  • The price of goods or services
  • Delivery costs
  • The arrangement of payments, delivery or
    performance
  • The existence of right of withdrawal
  • The cost of using the means of distance
    communication, where it is calculated other than
    the basic rates
  • The period for which the offer or price remains
    valid
  • The minimum duration of the contract and whether
    the contracts for the supply of goods are to be
    permanent or recurrent
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